Swiss Solvency Test (SST)

Domiciled in Switzerland, EUROPA Re is supervised by FINMA and is subject to Swiss Solvency Test (SST). Based on the SST regulation, the solvency ratio is calculated as SST risk-bearing capital (SST RBC) minus the market value margin (MVM), divided by SST solvency capital requirement (SCR).

SST ratio

The consistently high solvency ratio is a good indicator of the company’s creditworthiness. Based on SST 2020 report filed with FINMA in May 2020, EUROPA Re’s SST ratio as of January 1, 2020 remains at a high level of 216%.

The risk-based SST regime is fully-equivalent with the EU Solvency II, which specifies reinsurers’ probability of default based on (i) ratings assigned by external credit assessment institutions (ECAI’s) in case of rated reinsurers or (ii) risk-based solvency ratios in case of unrated reinsurers domiciled in EU-equivalent supervisory regimes.

As a new reinsurer, EUROPA Re does not hold a rating by an accredited ECAI. The risk-based solvency (SST) ratio can be used as a reliable alternative to an ECAI rating by measuring the company’s probability of default and credit quality step.